The present invention relates in general to a rotary engine of the internal combustion type and, more particularly, to a rotary engine which includes: a housing having therein a main rotor chamber providing a main rotor axis: a main rotor rotatable in the main rotor chamber about the main rotor axis in a predetermined direction of rotation; the main rotor being provided on its periphery with circumferentially spaced lobes; the housing having an intake communicating with the main rotor chamber; the main rotor chamber having a radius substantially equal to, but slightly exceeding, the outer radius of the lobes in a first zone bridging the intake and extending downstream therefrom in the direction of main rotor rotation; the main rotor chamber having a second zone extending downstream from the first zone in the direction of main rotor rotation; a combustion rotor chamber located downstream from the second zone in the direction of main rotor rotation and intersecting the main rotor chamber and providing a combustion rotor axis spaced from and parallel to the main rotor axis; a combustion rotor rotatable in the combustion rotor chamber and having circumferentially spaced combustion cavities therein to receive the lobes on the main rotor; the main rotor chamber having a radius substantially equal to, but slightly exceeding, the outer radius of the lobes in a third zone extending downstream from the combustion rotor in the direction of main rotor rotation; the housing having an exhaust communicating with the main rotor chamber in the third zone adjacent the downstream end of the third zone in the direction of main rotor rotation; an exhaust blocking rotor chamber located between the third and first zones and intersecting the main rotor chamber and providing an exhaust blocking rotor axis spaced from and parallel to the main rotor axis; an exhaust blocking rotor rotatable in the exhaust blocking rotor chamber and having circumferentially spaced cavities to receive the lobes on the main rotor; gear means interconnecting the main rotor, the combustion rotor and the exhaust blocking rotor; the peripheries of the combustion rotor and the exhaust blocking rotor being substantially tangent to the periphery of the main rotor between the lobes thereon; and means for producing a spark in each combustion cavity in the combustion rotor when the trailing edge of such combustion cavity is substantially tangent to the main rotor.